A recent NLJ article, “The Wild West of Fee Fights” reports that fee fights among plaintiffs attorneys in multidistrict litigation have forced more federal judges in recent cases to wade into the disputes — with practically no case law to guide them.

Within the last year, attorney fee fights in MDLs have erupted in personal injury and wrongful-death cases filed over Durom Cup hip implants, General Motors Co.’s ignition-switch defects and laparoscopic uterine surgical tools called power morcellators.  There are few appellate decisions on the matter and, in at least two recent cases, the fights have ended with failed petitions before the U.S. Supreme Court.

“There are huge issues about the governance of MDLs that no Supreme Court has addressed in any satisfying way,” said William Rubenstein, a professor at Harvard Law School who has testified as an expert for those challenging MDL fees.  “The fee aspects are one of a subset of questions of how they’re governed that have yet to attract good appellate law.  The district court judges are struggling with these issues.”

At issue is whether individual plaintiffs lawyers must contribute to a common benefit fund that helps lead lawyers in an MDL pay for costs such as depositions and discovery.  Because the cases are handled on contingency, the MDL judge usually requires a “holdback” of between 4 and 12 percent of fees and recoveries that plaintiffs and their lawyers get from settlements or judgments in order to create the common fund.

But not all plaintiffs lawyers acquiesce.  Some have challenged the assessments, insisting that lead lawyers in the MDL have done nothing to help them settle their cases.  And those with cases in state court have claimed that MDL judges, who issue common-benefit fund orders in federal court, have no jurisdiction over their cases.

The challenges, depending on their outcomes, could end up carving out limits to the common-benefit fund, a critical and long-standing mainstay that makes MDLs more affordable.  The Supreme Court on Feb. 29 rejected a petition to delve into the debate, leaving MDL judges to continue to make their own calls — a position most of them don’t want to be in, Rubenstein said.

Last month, U.S. District Judge Kathryn Vratil of Kansas heard arguments in a simmering fee dispute in the MDL involving Ethicon Inc.’s power morcellators.  The question is whether plaintiffs lawyers with recently settled cases against Ethicon Inc., a Johnson & Johnson unit, needed to pay into a common-benefit fund.

A similar dispute erupted in an MDL against Zimmer Biomet Holdings Inc. over its Durom Cup hip implants.  U.S. Magistrate Judge Steven Mannion in New Jersey is scheduled to hear arguments on March 17 over whether some plaintiffs lawyers should have been granted a reduction of their 4 percent assessment on ground that they didn’t rely on lead counsel’s work in settling their cases.

Gibbs Henderson of Dallas-based Waters Kraus & Paul, a lead lawyer in the Durom Cup MDL, has opposed the assessment reductions.

“We’re really the only firm litigating these cases and moving them toward trial,” he said.  Last year, the firm filed a motion to force plaintiffs with state court cases against Zimmer to contribute to the fund, but Mannion found that he didn’t have jurisdiction.

Attempts to get plaintiffs lawyers with state court cases to pay into common-benefit funds have been the most contentious.  State court cases don’t join an MDL because they often name local defendants, avoiding removal to a federal jurisdiction.

Although lawyers in those cases usually must follow many of the same discovery and protective orders as the MDL, they often pave their own paths.

To that end, attorney Lance Cooper, whose state court case in Georgia unveiled GM’s ignition-switch defect in 2013, lashed out at lead counsel in the MDL after they dismissed the first bellwether case midtrial on Jan. 22 following revelations that the plaintiff might have committed perjury and fraud.

Cooper, who acknowledged he was a newcomer to MDLs, accused lead counsel of shirking state court plaintiffs, among other things.  But his attacks also were premised in large part on concerns about contributing to lead counsel’s efforts.

“At the end of the day, when I settle my cases, my client has to pay the co-leads for the hourly work that they billed for,” said Cooper of The Cooper Firm in Marietta, Georgia.  “In other words, for a case they filed that they shouldn’t have filed, and lost that they shouldn’t have lost, they’re going to turn around and bill my client for that.  That’s just wrong.”

In his Feb. 10 order, U.S. District Judge Jesse Furman in New York called Cooper’s claims meritless, noting that he had no jurisdiction to oversee state court plaintiffs anyway.

But no one size fits all when it comes to whether plaintiffs lawyers in state court cases must contribute to a ­common-benefit fund.  Much depends on how many cases there are in the MDL, how many are in state court, and who’s doing all the work.

“There are situations where state court groups should not be subject to the common benefit at all because they’ve literally handled the litigation themselves,” said Pete Flowers of Chicago’s Meyers & Flowers, who has been involved in several MDLs, both as lead counsel and as a plaintiffs attorney with several cases in Illinois state court.  “On the flip side, there are state court litigators trying to take advantage of the situation and avoid paying it simply because of the money.  It’s really a case-by-case situation.”

What few appellate decisions exist haven’t clarified the rules.  In 2014, the U.S. Court of Appeals for the Eighth Circuit upheld U.S. District Judge Catherine Perry’s holding that she lacked jurisdiction to order plaintiffs attorneys with state court cases to contribute to a common-benefit fund for lead lawyers in an MDL against Bayer CropScience A.G. over genetically modified rice.

The panel also found that a San Antonio firm that represented 3,850 plaintiffs, most of them in state courts, waived its right to challenge the fund to which he was ordered to pay 11 percent of all his settlement proceeds.

In 2015, the Supreme Court declined to review a petition by the firm, now called Phipps Anderson Deacon.  The petition challenged the entire concept of the common-benefit fund — whether MDL judges were shifting millions of dollars in fees to lead counsel without statutory authority or case law to do so.

The latest Supreme Court petition raised a federalism argument.

Girardi Keese, which challenged more than $10 million in fees it was ordered to pay after settling 4,000 cases in California state court, had hoped to reverse a July 2 decision by the Third Circuit finding that the Los Angeles law firm had agreed to contribute to the common-benefit fund in an MDL over diabetes drug Avandia.

“If you have state court cases and you do all the work, all the experts, you do all that effort, then you should have a state court judge say what your fees are, not a federal judge who has nothing to do with the case,” said firm partner Thomas Girardi.

Despite his setback before the Supreme Court, he remained undeterred.  “I think it could be the beginning of telling lawyers involved in this multidistrict litigation they’ll have to be fair,” he said.